NBFCs ask FM to offer credit guarantees to banks on loans extended by them

Industry has also pitched for SPV with initial funding from govt, to help refinance small and mid-sized NBFCs

An association of non-banking finance companies has written to the finance minister, seeking alternate sources of funding for shadow lenders. It has urged her to provide credit guarantee to banks in order to encourage them to provide much-needed liquidity to a sector that they have for long been averse to lending.

The Finance Industry Development Council (FIDC) has said in its letter that the government may provide credit guarantee to banks for the additional exposure they take on NBFCs so long as they lend to deserving sectors. “This guarantee should be for both, term loans and asset pool purchase, and